Seoul [South Korea], November 1 (ANI/Global Economic): Stock price of LG Household & Health Care, a leading Korean beauty company, fell to their lowest level in about a year and a half due to the slowing demand for cosmetic products in China. Major securities firms in Korea said there is no momentum to recover LG Household & Health Care's stock price, and lowered their investment opinions to 'neutral,' which means virtually 'selling.'
According to the Korea Exchange on October 29, the stock price of LG Household & Health Care closed at 1,182,000 won, down 39,000 won (3.19 per cent) from the previous day, hitting the lowest record for 52 consecutive weeks. On October 27th, the day after the third-quarter earnings announcement, stock price decreased 8.26 per cent, showing the highest drop in five years since October 25, 2016 (-8.34 per cent).
It is the first time in about a year and a half that LG Household & Health Care's stock price has fallen below the 1.2 million won since April 16 last year (1191,000 won), right after the COVID-19 outbreak.
LG Household & Health Care's market capitalisation plunged to 18.46 trillion won as its stock price dropped by 33 per cent from 1,784,000 won in July. As a result, LG Household & Health Care, which ranked 11th in the market capitalisation (excluding preferred stocks) and was aiming to enter the Top10 at the end of last year, was overtaken by POSCO, KB Financial Group, SK Telecom, and LG Electronics and fell out of the top 20.
The decline in LG Household & Health Care's stock price was greatly affected by the slowdown in cosmetics consumption in China.
Park Eun-kyung, an analyst at Samsung Securities, said: "The current situation is highly uncertain how future cosmetics demand and market competition will be affected by the Chinese government's regulations on luxury product consumption and cosmetics marketing activities as well as falling demand due to China's macroeconomic instability."
In particular, it is analysed that concerns that LG Household & Health Care's luxury beauty brand 'Whoo' will not show rapid growth at the past level were reflected in decrease of stock price. (ANI/Global Economic)